New grads join worst entry-level job market in years

By Claire Ballentine

Robert Trowe never imagined it would be so difficult landing a full-time job. By the time the 21-year-old graduated from Arizona State University in May, he had a roster of references, a network of family and alumni offering advice and a summer internship at JPMorgan Chase & Co. under his belt. Like any good finance major, he’s kept a spreadsheet of all 300 jobs he’s applied to since the start of his senior year, and the stats are bleak: Just 4 per cent resulted in interviews, 33 per cent sent an automated rejection, and the rest haven’t gotten back at all. “The entry-level roles are few and far between,” he says. “Everyone I know who is graduating right now is struggling.”

Every generation seems to think they’re entering the workforce at a difficult time—just ask those still-reeling 2008 grads who launched during the Great Recession—and they’re not entirely wrong. After all, the US has undergone three recessions since 2000. But there are signs the most recent college grads are facing especially brutal conditions, thanks in part to the rise of artificial intelligence, which is replacing some entry-level positions, and the hiring freezes implemented across much of corporate America under the threat of President Donald Trump’s on-again-off-again tariffs.

Although the economy still appears to be on solid footing by many metrics—with the overall unemployment rate little changed in May—the number of unemployed people just rose for a fourth straight month, the longest such streak since 2009, government data show. And younger people in particular are feeling the pain.

The unemployment rate for degree-holders age 22 to 27 hit 5.8 per cent earlier this spring, according to data from the Federal Reserve Bank of New York, its highest level in about four years—and well above the national average. Companies have cut the number of college grads they planned to hire this spring; it’s now harder to land an entry-level role at one of the big banks than it is to get into Harvard University. (At Goldman Sachs Group Inc., the acceptance rate for the 2024 intern class was just 0.9 per cent.) In fact, according to Oxford Economics, since mid-2023, 85 per cent of the rise in the unemployment rate is because of new labor market entrants.

For those just starting off their careers, even a short period without work can have long-term effects. Someone who experiences six months of unemployment at age 22 can expect to earn about $22,000 less over the next decade, according to the Center for American Progress, a public-policy researcher. It’s a tricky moment for a cohort that already had key years of its education disrupted by the Covid-19 pandemic.

“I’ve just been totally taken aback by the job market,” says Jack McDonagh, a 21-year-old who graduated from Fordham University last month and is looking for a marketing position in New York City. “You can’t understand how competitive it is until you apply for 50 jobs and hear back from no one.” Businesses across a whole host of industries, including energy company Chevron, shoemaker Nike and tech giants Microsoft and Amazon.com have been laying off employees; the federal government has been doing the same.

Not all majors are hurting equally. The unemployment rate among college graduates who studied construction services, for instance, was just 0.7 per cent in the most recent data; for nutrition sciences, it’s an impressive 0.4 per cent, data from the New York Fed show. But computer engineering majors—once among the most highly sought-after specialisations—have the third-highest unemployment rate for recent grads, at 7.5 per cent, after only anthropology and physics majors. And while employment in computer science and mathematical jobs for those older than 27 has grown 0.8 per cent since 2022, Oxford Economics says, it has dropped 8 per cent for more recent graduates.

Some of that can be traced to AI. In a recent survey of executives on LinkedIn, more than 60 per cent said AI will eventually take on some of the tasks currently assigned to entry-level employees, especially the more mundane and manual roles. Meta Platforms Inc. Chief Executive Officer Mark Zuckerberg, for instance, has spoken publicly about using AI engineers to do a lot of basic, midlevel coding as early as this year.

Anna Steinmeyer, 23, suspects that advances in AI are part of the reason she’s struggling to land a full-time role. The Chicago native, who graduated from American University in the spring of 2024, applies for 10 to 20 open positions each week but almost never gets to the interview stage. Most of the jobs she’s seeking are administrative assistant roles or positions at marketing agencies. Although she’d hoped to get a job in theater production, she’s been expanding her search—“beggars can’t be choosers,” she says. “The growth and change of technology has made some of these tasks obsolete,” Steinmeyer says. “It’s easier to use technology than to pay a person.”

The job search is extra stressful for the recent grads who are on student visas and need a potential employer to sponsor them. The H-1B program, for one, which allows employers to temporarily hire skilled workers from abroad, has been caught in the political crosshairs during Trump’s second term. Uday Medisetty, an Indian citizen who earned his master’s degree in computer science from the University of Florida in May, estimates he’s applied to more than 100 jobs in the past six months with no luck. If he can’t find a role by the end of the summer, he’ll likely go back to India.

Trowe, the Arizona State graduate, is still hoping to land some kind of position in commercial banking. But if he doesn’t get something in the next few months, he says he might have to take a job at a call center or do technical support for a bank. After all, last month, the US Department of Education resumed collections on defaulted student loans after more than five years of pandemic-era leniency; in six months, Trowe will have to start making payments on his $15,000 of college debt.